Exhibit 10.21
AURORA-TREND STILLWATER VENTURE
AGREEMENT
JOINT VENTURE
between
AURORA METALS (BVI) LIMITED
and
TREND MINING COMPANY
[GRAPHIC OMITTED]
JANUARY 1, 2005
Aurora-Trend Stillwater Venture Page i of iv January 26, 2005
TABLE OF CONTENTS
SECTION TITLE PAGE NO.
JOINT VENTURE AGREEMENT - RECITALS 1
ARTICLE 1. - DEFINITIONS 1
ARTICLE 2. - REPRESENTATION AND WARRANTIES - TITLE TO ASSETS 4
2.1 Capacity of Participants 4
2.2 Representations and Warranties 5
Remedies for Breach of Representations and Warranties of Title to the
2.3 Properties 6
2.3.1 Loss of Title 6
2.3.2 Less than 100% Interest 6
2.3.3 Third Party Claims 6
2.4 Disclosures 7
2.5 Record Title 7
ARTICLE 3. - NAME, PURPOSES AND TERM 7
3.1 General 7
3.2 Name 7
3.3 Purposes 7
3.4 Limitation 8
3.5 Effective Date and Term 8
ARTICLE 4. - RELATIONSHIP OF THE PARTICIPANTS 8
4.1 No Partnership 8
4.2 U.S. and State Tax Elections and Allocations 9
4.3 Other Business Opportunities 9
4.4 Waiver of Right to Partition 9
4.5 Transfer or Termination of Rights to Properties 9
4.6 Implied Covenants 10
ARTICLE 5. - CONTRIBUTIONS BY PARTICIPANTS 10
5.1 Participants' Initial Contributions 10
5.2 Obligations Prior to Earn-In 10
5.2.1 Annual and Cumulative Exploration Expenditures 10
5.2.2 Overhead Charges During Earn-In 10
5.2.3 Carry-forward of Excess Cumulative Exploration Expenditures 11
5.2.4 Maintenance of Properties During Earn-In 11
5.3 Payments by TMC to AM 11
5.3.1 Payment at Closing 11
5.3.2 Annual Payments 11
5.4 Termination of TMC's Obligation to Make Initial Contribution 11
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SECTION TITLE PAGE NO.
5.5 Additional Cash Contributions 12
5.6 Earn-In 12
5.7 Reports 12
ARTICLE 6. - INTERESTS OF PARTICIPANTS DEFAULTS AND REMEDIES 12
6.1 Participating Interests 12
6.2 Elections at Time of Earn-In 13
6.3 Deemed Expenditures 13
6.4 Changes in Participating Interests 13
6.5 Voluntary Reduction in Participation 13
6.6 Default in Making Contributions 14
6.7 Conversion of Interest 15
6.8 Continuing Liabilities Upon Adjustments of Participating Interests 15
ARTICLE 7. - MANAGEMENT COMMITTEE 16
7.1 Organization and Composition 16
7.2 Decisions 16
7.3 Meetings 16
7.4 Action Without Meeting 17
7.5 Matters Requiring Approval 17
ARTICLE 8. - MANAGER 17
8.1 Appointment 17
8.2 Powers and Duties of the Manager 17
8.3 Standard of Care 20
8.4 Resignation - Deemed Offer to Resign 20
8.5 Payments to Manager 21
8.6 Transactions with Affiliates 21
8.7 Activities During Deadlock 21
ARTICLE 9. - PROGRAMS AND BUDGETS 21
9.1 Initial program and Budget 21
9.2 Operations Pursuant to Programs and Budgets 22
9.3 Presentation of Programs and Budgets 22
9.4 Review and Approval of Proposed Programs and Budgets 22
9.5 Election to Participate 22
9.6 Deadlock on Proposed Programs and Budgets 22
9.7 Budget and Overruns - Program Changes 23
9.8 Emergency or Unexpected Expenditures 23
ARTICLE 10. - ACCOUNTS AND SETTLEMENTS 23
10.1 Matters of Accounts and Settlements 23
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SECTION TITLE PAGE NO.
ARTICLE 11. - DISPOSITION OF PRODUCTION 23
11.1 Taking in Kind 23
11.2 Failure of participant to Take in Kind 24
ARTICLE 12. - WITHDRAWAL AND TERMINATION 24
12.1 Termination by Expiration or Agreement 24
12.2 Withdrawal 24
12.3 Continuing Obligations 24
12.4 Disposition of Assets on Termination 25
12.5 Right to Data After Termination 25
12.6 Continuing Authority 25
12.7 Non-Compete Covenants 26
12.8 Mutual Withdrawal 26
12.9 Right to Data After Termination 26
ARTICLE 13. - SURRENDER OF PROPERTIES 27
13.1 Surrender of Properties 27
13.2 Re-acquisition 27
ARTICLE 14. - TRANSFER OF INTEREST 27
14.1 General 27
14.2 Limitations on Free Transferability 27
14.3 Right of First Refusal 28
14.4 Exceptions to Right of First Refusal 29
ARTICLE 15. - CONFIDENTIALITY AND RELEASES 29
15.1 General 29
15.2 Exceptions 29
15.3 Confidentiality 30
ARTICLE 16. - AREA OF INTEREST 30
16.1 Acquisitions in Area of Interest 30
ARTICLE 17. - GENERAL PROVISIONS 31
17.1 Notices 31
17.2 Waiver 32
17.3 Modification 32
17.4 Force Majeure 32
17.5 Economic Force Majeure 33
17.6 Governing Law 33
17.7 Rule Against Perpuity 33
17.8 Further Assurances 33
17.9 Survival of Terms and Conditions 33
17.10 Entire Agreement 33
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SECTION TITLE PAGE NO.
17.11 Memorandum 34
17.12 Funds 34
Signature Page 35
SCHEDULES
A Properties and Underlying Agreements
A-1 Schedule of Claims Included in Properties
Basal Zone Lease Agreement
A-2 Schedule of Claims Included in Properties
Mountain View Lease Agreement
B Accounting Procedures
C Net Smelter return Royalty
D Insurance
E Plan of Claims in Properties - Area of Interest
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JOINT VENTURE AGREEMENT
THIS AGREEMENT, made effective as of January 1, 2005 between AURORA METALS (BVI)
LIMITED (hereafter "AM") with an address at ▇.▇. ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇ and TREND MINING COMPANY (hereafter "TMC") with an address at ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
RECITALS
A. AM and TMC entered into a Letter of Intent (hereafter "LOI") dated
September 20, 2004, subsequently extended until February 18, 2005, agreeing
to form a Joint Venture (hereafter "JV") to explore and develop property
leased by or owned by AM.
B. TMC wishes to participate with AM in exploration, evaluation, development
and mining of minerals within the property and AM is willing to grant such
right to TMC.
NOW, THEREFORE, in consideration of the covenants and agreements contained
herein, AM and TMC agree as follows:
ARTICLE 1. - DEFINITIONS
"Accounting Procedure" means the procedures set forth in Schedule B.
"Affiliate" means any person, partnership, joint venture, corporation or other
form of enterprise which directly or indirectly controls, is controlled by, or
is under common control with, a Participant. For purposes of the preceding
sentence, "control" means possession, directly or indirectly, of the power to
direct or cause direction of management and policies through ownership of voting
securities, contract, voting trust or otherwise.
"Agreement" means this Joint Venture Agreement, including all amendments and
modifications thereof, and all schedules and Schedules, which are incorporated
herein by this reference.
"Area of Interest" means those claims in the Stillwater Complex, Stillwater and
Sweet Grass Counties, Montana as specified in Schedules A-1 and A-2 and within
two miles of the boundaries of these claims and any other claims subsequently
acquired by AM.
"Assets" means the Properties, Products and all other real and personal
property, tangible and intangible, held for the benefit of the Participants
hereunder.
"Budget" means a detailed estimate of all costs to be incurred by the
Participants with respect to a Program and a schedule of cash advances to be
made by the Participants.
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"Commencement of Commercial Production" means the date upon which the production
and processing facilities developed under this Agreement achieve an ore
production and processing rate for a continuous thirty-day (30) period equal to
at least ninety percent (90%) of the design rate established in a Feasibility
Study, or such performance criteria as laid down by the principal lenders,
bankers and/or financial institutions providing capital to the Development.
"Development" means all preparation for the removal and recovery of Products,
including the construction or installation of a mill or any other improvements
to be used for the mining, handling, milling, processing or other beneficiation
of Products, and all Exploration work conducted subsequent to a decision to
commence Development as contemplated by a Feasibility Study.
"Earn-In" means the date upon which TMC earns its interest in the Properties
pursuant to Section 5.6.
"Exploration" means all activities directed toward ascertaining the existence,
location, quantity, quality or commercial value of deposits of Products.
"Exploration Expenditures" means the cost of evaluation of the Properties
defined as further exploring and developing the Properties, including drilling,
excavating and searching by recognized prospecting techniques, sampling,
assaying, testing and evaluating materials removed from the Properties, mapping,
plotting, surveying, constructing and maintaining camps, roads, works and
structures necessary to carry out such evaluation, sampling or testing, all
studies including, but not limited to, a Feasibility Study required to develop a
mine and all work that may be required in preparing a mine for operating, the
cost or payments to maintain the Properties, including costs to locate and/or
relocate the unpatented mining claims, costs to maintain the Underlying
Agreements through which the Properties are acquired and costs reimbursed by TMC
to AM for maintaining the Underlying Agreements, Properties acquisition costs,
taxes and/or fees to maintain Properties and filings together with an allowance
for overhead and administrative expenses as described in Section 5.3.1. These
expenditures include both exploration costs as defined in Section 617 of the
Internal Revenue Service Code and development expenditures as defined in Section
616 of the Internal Revenue Service Code.
"Feasibility Study" means a detailed study compiled by an independent third
party, selected and jointly approved by the Management Committee, conducted to
determine commercial feasibility and viability of placing a prospective orebody
or deposit into production and may include, but not be limited to:
(i) such geophysical, geochemical, geological, aerial or other survey as
may be necessary to provide a reasonable estimate of the quality and
extent of the deposit;
(ii) such technical or assay reports as may be necessary to evaluate any
proposed method of extraction and processing;
(iii) the area required for optimum development of the orebody or deposit;
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(iv) a mine construction program setting forth the descriptions of the
work, permits, equipment, facilities, supplies and mines required to
bring the prospective orebody or deposits of Products into Commercial
Production, and the estimated costs thereof or a schedule of
expenditures by year of the costs necessary to bring the project into
production;
(v) details of a proposed annual program for initial development of the
deposit;
(vi) a plan for such reclamation of the Properties as is required by law
and the estimated costs hereof;
(vii) conclusions and recommendations regarding the economic feasibility
and timing for bringing the prospective orebody or deposits of
Products into Commercial Production, taking into account items (i)
through (vi) above;
(viii) such other information as the Management Committee may deem
appropriate to allow banking or other financial institutions familiar
with the mining business to make a decision to loan funds sufficient
to construct the proposed mine with security based solely on the
reserves and mine described in a Feasibility Study.
"Initial Contribution" means that contribution each Participant has made or
agrees to make pursuant to Section 5.1.
"Joint Account" means the account maintained in accordance with the Accounting
Procedure showing the charges and credits accruing to the Participants.
"Management Committee" means the committee established under Article 7.
"Manager" means TMC during the Earn-In phase or the person or entity appointed
under Article 8 to manage Operations, or any succeeding Manager.
"Mining" means the mining, extracting, producing, handling, milling or other
processing of Products.
"Operations" means the activities carried out under this Agreement after
Earn-In.
"Participant" and "Participants" means the persons or entities that have a
Participating Interest.
"Participating Interest" means the percentage interest representing the
operating ownership interest of a Participant in Assets, and all other rights
and obligations arising under this Agreement, as such interest may from time to
time be adjusted hereunder. Participating Interests shall be calculated to
three decimal places and rounded to two (e.g., 1.519% rounded to 1.52%).
----
Decimals of .005 or more shall be rounded up to 0.01; decimals of less than
0.005 shall be rounded down. The initial Participating Interests of the
Participants are set forth in Section 6.1.
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"Prime Rate" means the prime interest rate quoted as "Prime" by the Wall Street
Journal as said rate may change from day to day and which quoted rate may not be
the lowest rate averaged on a month-to-month basis at which a financing
institution loans funds.
"Production Decision" means a decision by the Management Committee to commence
Development and put the Properties into production.
"Products" means all ores, minerals, and mineral resources produced from the
Properties under this Agreement.
"Program" means a description in reasonable detail of the activities of the
Venture which are to be conducted by the Manager during a period.
"Properties" means those interests in property described in the schedules in
Schedules A-1 and A-2 and depicted on the map forming Schedule E.
"Simple Majority" means a decision by the Management Committee by greater than
50% of the votes being entitled to be cast.
"Transfer" means sell, grant, assign, encumber, pledge or otherwise commit or
dispose thereof.
"Underlying Agreements" means the Mountain View Lease Agreement and the Basal
Zone Lease Agreement to which AM is a signatory together with the granting
lessors thereunder.
"Venture" means the business arrangement of the Participants under this
Agreement to be known as the Aurora-Trend Stillwater Venture.
ARTICLE 2. - REPRESENTATIONS AND WARRANTIES - TITLE TO ASSETS
2.1 CAPACITY OF PARTICIPANTS
Each of the parties hereto represents and warrants as follows:
(i) that it is a corporation duly incorporated and in good standing in its
state of incorporation and that it is qualified to do business and is
in good standing in those jurisdictions where necessary in order to
carry out the purposes of this Agreement;
(ii) that it has the capacity to enter into and perform this Agreement and
all transactions contemplated herein and that all corporate and other
actions required to authorize it to enter into and perform this
Agreement have been properly taken;
(iii) that it will not breach any other agreement or arrangement by
entering into or performing this Agreement; and
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(iv) that this Agreement has been duly executed and delivered by it and is
valid and binding upon it in accordance with its terms.
2.2 REPRESENTATIONS AND WARRANTIES
AM makes the following representations and warranties effective the date
hereof:
(i) that it has the full and exclusive right and power to act on behalf of
AM, and on behalf of any other interested person or entities, to enter
into this Agreement and to grant the rights granted to AM hereunder;
(ii) to the best of its knowledge and belief with respect to unpatented
mining claims set forth in Schedules A-1 and A-2 that are included
within the Properties, subject to the paramount title of the United
States and except as disclosed in writing to TMC:
(a) the unpatented mining claims were properly laid out and
monumented;
(b) all required location and validation work was properly performed;
(c) location notices and certificates were properly recorded and
filed with appropriate governmental agencies;
(d) the claims are free and clear of defects, liens and encumbrances
arising by, through or under AM, except those of record or
disclosed in writing to TMC and defects, liens, and any such
encumbrances that do not materially affect TMCs' rights under
this Agreement;
(e) AM has not received notice from anyone asserting conflicting
claims;
(f) the unpatented mining claims are in good standing and compliance
with all federal and state regulations in force as of the
effective date of this Agreement; and
(g) the claims forming the Properties have been assigned to the
Aurora-Trend Stillwater Venture in accordance with the Underlying
Agreements.
(iii) knows of no violation of any applicable federal, state, regional, or
county law or regulation relating to zoning, land use, environmental
protection, or otherwise with respect to the Properties or activities
relating thereto;
(iv) with respect to the Properties, knows of no pending or threatened
actions, suits, claims or proceedings; and
(v) has granted TMC access to all information concerning title to the
Properties in AM's possession or control, including but not limited
to, true and correct copies
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of all leases, other contracts and abstracts relating to the
Properties of which AM has knowledge.
The representations and warranties set forth above shall survive the execution
and delivery of any documents of Transfer provided under this Agreement.
2.3 REMEDIES FOR BREACH OF REPRESENTATIONS AND WARRANTIES OF TITLE TO THE
PROPERTIES
2.3.1 LOSS OF TITLE
Any failure or loss of title to the Properties, and all costs of
defending title, shall be charged to the Joint Acccount, except
that all costs and losses arising out of, or resulting from,
breach of the representations and warranties of AM shall be
charged to AM, and all such costs and losses arising out of gross
negligence by TMC, or the Manager, shall be charged to TMC, or
the Manager, as may be the case. TMC shall have the right, but
not the obligation, to undertake to cure such defects, or to
defend, or to litigate to defend such defects.
2.3.2 LESS THAN 100% INTEREST
In the event it is determined that AM controls less than the full
undivided interest therein, AM's interest hereunder shall bear
the same proportion to 100% as its total actual interest bears to
the full undivided whole.
2.3.3 THIRD PARTY CLAIMS
(i) If AM fails to satisfy and discharge any mortgage, lien, tax
levy or encumbrance (an "Encumbrance") chargeable solely or
in part to AM on the claims listed in Schedules A-1 and A-2
or the Underlying Agreements therein, or suffers or permits
any encumbrance to be imposed upon such, TMC at its option
may, but shall not be obligated to, pay for and discharge
any encumbrance and set off a such payment by withholding
and retaining from any payments due AM any amounts so paid
by TMC, without prejudice to any right of TMC to recover
from AM are against the claims listed in Schedules A-1 or
A-2 or the Underlying Agreements the amount of such payment
in any manner or by any remedy whatsoever, and TMC shall
have all the rights and remedies against AM which the
mortgagor, lienor or creditor had immediately prior to the
time of such payment. Upon the request of TMC, AM shall
promptly make, execute, acknowledge and deliver to TMC any
and all instruments (in a form and substance satisfactory to
TMC) that TMC in its sole judgment may deem necessary or
desirable to fully effectuate the provisions of this Section
2.3.
(ii) If any person or entity not a party hereto asserts to have a
claim of ownership in the claims listed on Schedules A-1 or
A-2 or the Underlying Agreements, or a claim to a share in
the production from the claims listed
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in Schedules A-1 and A-2 (an "Adverse Claim"), TMC, at its
sole discretion, after written notice to AM, may suspend its
obligation to make payments as provided herein, and in lieu
thereof, may deposit in an interest-bearing account payments
equivalent to payments which may otherwise become due AM.
Such deposits or deposits shall remain in such
interest-bearing account until the claims or controversy is
resolved or settled by final court decision, by arbitration,
negotiation or otherwise. When TMC is required, or elects,
to make any payments to such persons or entities not a party
hereto, as a result of, or in settlement of, any such
adverse claim, either by way of contract, settlement,
compromise, final court judgment, or otherwise, TMC may
recover from, or credit against, any payments thereafter
becoming due to AM hereunder, the amount of such payments of
all other costs and expenses (including reasonable
attorneys' fees) paid or incurred by TMC as a result of any
such Adverse Claim.
2.4 DISCLOSURES
Each of the Participants represents and warrants that it is unaware of any
material facts or circumstances which have not been disclosed in this
Agreement, which would be disclosed to the other Participant in order to
prevent the representations in this Article 2 from being materially
misleading.
2.5 RECORD TITLE
Title to the Assets shall be held by the Venture after TMC has earned its
interest.
ARTICLE 3. - NAME, PURPOSES AND TERM
3.1 GENERAL
AM and TMC hereby enter into this Agreement for the purposes hereinafter
stated, and they agree that all of their rights and all of the Operations
on or in connection with the Properties shall be subject to and governed by
this Agreement.
3.2 NAME
The name of this Venture shall be the "Aurora-Trend Stillwater Venture".
The Manager shall accomplish any registration required by applicable
assumed or fictitious name statutes and similar statutes.
3.3 PURPOSES
This Agreement is entered into for the following purposes and for no
others, and shall serve as the exclusive means by which the Participants,
or either of them, accomplish
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such purposes:
(i) to conduct Exploration within the Properties;
(ii) to evaluate the possible Development of the Properties;
(iii) to engage in Development and Mining Operations on the Properties, if
feasible;
(iv) to engage in marketing Products, but only to the extent permitted by
Article 11; and
(v) to perform any other activity necessary, appropriate, or incidental to
any of the foregoing.
3.4 LIMITATION
Unless the Participants otherwise agree in writing, the Operations shall be
limited to the purposes described in Section 3.3, and nothing in this
Agreement shall be construed to enlarge such purposes.
3.5 EFFECTIVE DATE AND TERM
The Effective Date of this Agreement shall be the date first recited above.
The term of this Agreement shall be for twenty (20) years from the
Effective Date and for so long thereafter as Products are produced from the
Properties, unless the Agreement is terminated earlier as provided herein.
ARTICLE 4. - RELATIONSHIP OF THE PARTICIPANTS
4.1 NO PARTNERSHIP
Nothing contained in this Agreement shall be deemed to constitute either
Participant the partner of the other, nor, except as otherwise herein
expressly provided, to constitute either Participant the agent or legal
representative of the other, nor to create any fiduciary relationship
between them. It is not the intention of the Participants to create, nor
shall this Agreement be construed to create, any mining, commercial or
other partnership.
Neither Participant shall have any authority to act for or to assume any
obligation or responsibility on behalf of the other Participant, except as
otherwise expressly provided herein. The rights, duties, obligations and
liabilities of the Participants shall be several and not joint or
collective. Each Participant shall be responsible only for its obligations
as herein set out and shall be liable only for its share of the costs and
expenses as provided herein, it being the express purpose and intention of
the Participants that their ownership of Assets and the rights acquired
hereunder shall be as tenants in common.
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Each Participant, its directors, officers, employees, agents and attorneys
shall be indemnified from and against any and all losses, claims, damages
and liabilities arising out of any act or any assumption of liability by
the indemnifying Participant, or any of its directors, officers, employees,
agents and attorneys done or undertaken, or apparently done or undertaken,
on behalf of the other Participant, except pursuant to the authority
expressly granted herein or as otherwise agreed in writing between the
Participants.
4.2 U.S. TAX ELECTIONS AND ALLOCATIONS
Without changing the effect of Section 4.1, the Participants agree that
their relationship shall constitute a tax partnership within the meaning of
▇▇▇▇▇▇▇ ▇▇▇ (▇) ▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Internal revenue Code of 1986, as
amended. The Particpants hereto agree to execute or join in such
instruments as are necessary to make such election effective, and hereby
authorize and direct Manager to take such action as is necessary to
effectuate such purpose, including filing of the partnership tax return
required by Treasury Regulation Sec. 1.761-2(b)(2). Each Participant shall
be entitled to claim all tax benefits, write-offs, and deductions with
respect to all, and any, costs which it has incurred.
The Participants also agree that, to the extent permissible under
applicable law, their relationship shall be treated for state income tax
purposes in the same manner as it is for federal income tax purposes.
The Manager shall be the Tax Matters Partner and shall prepare and file,
after approval of the management Committee, any tax returns or other tax
forms required.
4.3 OTHER BUSINESS OPPORTUNITIES
Except as expressly provided in this Agreement, each Participant shall have
the right independently to engage in and receive full benefits from
business activities, whether or not competitive with the Operations,
without consulting the other. The doctrines of "corporate opportunity" or
"business opportunity" shall not be applied to any other activity, venture,
or operation of either Participant. Unless otherwise agreed in writing, no
Participant shall have any obligation to mill, beneficiate or otherwise
treat any Products or any other Participant's share of Products in any
facility owned or controlled by such Participant.
4.4 WAIVER OF RIGHT TO PARTITION
The Participants hereby waive and release all rights of partition, or of
sale in lieu thereof, or other division of Assets, including any such right
provided by statute.
4.5 TRANSFER OF TERMINATION OF RIGHTS TO PROPERTIES
Except as otherwise provided in this Agreement, neither participant shall
transfer all or any part of its interest in the assets or this Agreement or
otherwise permit or cause such interest to terminate.
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4.6 IMPLIED COVENANTS
There are no implied covenants contained in this Agreement other than those
of good faith and fair dealing.
ARTICLE 5. - CONTRIBUTIONS BY PARTICIPANTS
5.1 PARTICIPANTS' INITIAL CONTRIBUTIONS
AM, as its Initial Contribution, hereby contributes the Properties
described in Schedules A-1 and A-2 to the purposes of this Agreement. TMC,
as its Initial Contribution, shall contribute the Exploration Expenditures
and payment as hereinafter set forth.
5.2 OBLIGATIONS PRIOR TO EARN-IN
Prior to earning its interest in the Properties, and subject to the
termination provisions contained herein, TMC shall be required, but not
obligated to make the following Exploration Expenditures on or for the
benefit of the Properties to extend this Agreement into the next period.
5.2.1 ANNUAL AND CUMULATIVE EXPLORATION EXPENDITURES
TMC shall expend, as a minimum, the following annual and
cumulative Exploration Expenditures:
EXPLORATION EXPENDITURES
ANNUAL EXPENDITURE CUMULATIVE EXPENDITURE
YEAR ($) ($)
1 100,000 100,000
2 400,000 500,000
3 500,000 1,000,000
4 500,000 1,500,000
5 500,000 2,000,000
TOTAL 2,000,000
Year 1, for purposes of calculating annual expenditures shall end on
December 31, 2005 and each subsequent year shall end on December 31.
5.2.2 OVERHEAD CHARGES DURING EARN-IN
Five percent (5%) of all Exploration Expenditures, except
property payments, taxes and/or fees to maintain the Properties,
to cover TMC' overhead and administrative costs shall be charged
by TMC and shall qualify as Exploration
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Expenditures but shall be limited to five percent (5%) on
contracts in excess of One Hundred Thousand Dollars ($100,000).
5.2.3 CARRY-FORWARD OF EXCESS CUMULATIVE EXPLORATION EXPENDITURES
All Exploration Expenditures shall be cumulative and any
Exploration Expenditures in excess of the minimum required in any
period shall be credited and applied toward any subsequent
Exploration Expenditures.
5.2.4 MAINTENANCE OF PROPERTIES DURING EARN-IN
During the Earn-In period TMC shall be responsible for
maintaining the underlying agreements in good standing and for
maintaining the unpatented lode claims which comprise the
properties and may relocate any of the unpatented claims which
TMC believes may be defective. In addition, TMC agrees to
reimburse AM for the lease payments, including those payable to
the Bureau of Land Management, incurred by AM on a pro rata basis
commensurate with the ratio of the claims in the Properties to
the total claims under the Underlying Agreements.
5.3 PAYMENTS BY TMC TO AM
5.3.1 PAYMENT AT CLOSING
Upon execution of this Agreement, TMC shall issue fifty thousand
(50,000) shares of TMC's unrestricted, registered common stock to
AM.
5.3.2 ANNUAL PAYMENTS
To keep the joint venture agreement in good standing:
(i) on the first anniversary date, i.e. January 1, 2006, TMC
shall pay $20,000 in cash, and issue 20,000 shares of TMC's
common stock to AM; and
(ii) on the second, third, fourth and fifth anniversary dates
until Earn-In, TMC shall issue $20,000 in cash or the
equivalent value in TMC's unrestricted, registered common
stock determined by the average stock price over the
previous calendar month.
5.4 TERMINATION OF TMC'S OBLIGATION TO MAKE INITIAL CONTRIBUTION
TMC may terminate this Agreement at any time during the Earn-In period for
any reason, or no reason, by providing AM sixty (60) days written notice of
such termination. Until TMC has earned its interest in the Properties, TMC
shall conduct exploration activities, maintain the Properties and shall
conduct operations according to programs and budgets determined by the
Management Committee. TMC shall hold AM
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harmless from any liabilities resulting from TMC's activities on the
Properties during the Earn-In period.
Upon TMC's termination under the provisions of this Section 5.4, TMC shall
have no further right, title or interest in the Venture. TMC's withdrawal
shall be effective upon such termination, but such withdrawal shall nor
relieve TMC of its obligation to fund and satisfy any liabilities to third
persons incurred or payments due to AM prior to TMC's withdrawal.
5.5 ADDITIONAL CASH CONTRIBUTIONS
At such time as TMC has earned its fifty percent (50%) interest in the
Properties, pursuant to Section 5.2, the Participants, subject to any
election permitted by Sections 6.1, 6.2 and 6.3, shall be obligated to
contribute funds to adopted Programs and Budgets in proportion to their
respective Participating Interest.
5.6 EARN-IN
TMC shall earn a fifty percent (50%) Participating Interest in the
Properties upon completion of the Exploration Expenditures and payment set
forth under Section 5.2. If TMC expends the $2,000,000 commitment in
Section 5.2 prior to the end of Year 5, it will be deemed to have earned
its Participating Interest at that time. Except as provided for in Section
6.2, subsequent to TMC earning fifty percent (50%) interest in the Venture,
all expenditures for the benefit of the Properties shall be contributed by
the Parties in accordance to their Participating Interest. Immediately upon
TMC satisfying its Earn-In requirements under Section 5.2, AM shall execute
an Assignment of Interests Agreement and deliver to TMC such documents that
are necessary to transfer an appropriate percentage of interest in AM's
interest in and to the Properties to TMC.
5.7 REPORTS
TMC shall, during the Earn-In period, provide AM with copies of periodic
reports describing its activities on the Properties and shall conduct a
semi-annual review with AM to discuss the progress TMC has made during the
preceding period as well as the plans and programs being contemplated for
the next period.
ARTICLE 6. - INTERESTS OF PARTICIPANTS DEFAULTS AND REMEDIES
6.1 PARTICIPATING INTERESTS
TMC shall have no Participating Interest unless and until it has completed
the Exploration Expenditures set forth in Section 5.2 during the Earn-In
period. The Participants shall have the following Participating Interests
upon TMC's completion of the obligations set forth in Section 5.2:
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TMC - 50%
AM - 50%
6.2 ELECTIONS AT TIME OF EARN-IN
At such time as TMC completes the obligations set forth in Section 5.2 and
has earned its fifty percent (50%) Participating Interest in the
Properties, AM and TMC shall have a period of sixty (60) days to either
(i) elect to participate in the Venture and contribute to each Program and
Budget for their entire respective Participating Interest, or
(ii) to elect to withdraw from the Venture and convert to a Net Smelter
Return of 2.5% as set out in Schedule C.
6.3 DEEMED EXPENDITURES
At Earn-In TMC and AM shall, irrespective of their actual expenditures on
or with respect to the Properties, be deemed to have incurred expenditures
as follows:
TMC $2,000,000
AM $2,000,000
6.4 CHANGES IN PARTICIPATING INTERESTS
A Participant's Participating Interest shall be changed as follows:
(i) as provided in Sections 6.2 or 6.7; or
(ii) upon an election by a Participant pursuant to Section 6.5 to
contribute less to an adopted Program and Budget than the percentage
reflected by its Participating Interest; or
(iii) in the event of default by a Participant in making its agreed-upon
contribution to an adopted Program and Budget; or
(iv) transfer by a Participant of less than all its Participating Interest
in accordance with Article 14: or
(v) acquisition of less than all of the Participating Interest of the
other Participant, however arising.
6.5 VOLUNTARY REDUCTION IN PARTICIPATION
Except with respect to a participant's obligation to make its Initial
Contribution, as to
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which no election is permitted, a Participant may elect, as provided in
Section 9.5, to limit its contributions to an adopted Program and Budget as
follows:
(i) to some lesser extent than its respective Participating Interest; or
(ii) not at all.
If a Participant elects to contribute to an adopted Program and Budget some
lesser amount than its respective Participating Interest, or not at all,
the Participating Interest of that Participant shall be recalculated at the
time of election by dividing:
(i) the sum of
(a) the value of the Participant's Initial Contribution as per
Section 6.3,
(b) the total of all of the Participant's contributions under Section
5.3, and
(c) the amount, if any, the Participant elects to contribute to the
adopted Program and Budget;
by
(ii) the sum of (a), (b) and (c) above for all Participants;
and then multiplying the result by one hundred.
The Participating Interest of the other Participant shall thereupon become
the difference between one hundred percent (100%) and the recalculated
Participating Interest.
6.6 DEFAULT IN MAKING CONTRIBUTIONS
If a Participant defaults in making a contribution or cash call required by
an approved Program and Budget, the non-defaulting Participant may advance
the defaulted contribution on behalf of the defaulting Participant and
treat the same, together with any accrued interest, as a demand loan
bearing interest from the date of the advance at the Prime Rate plus two
percent (2%) compounded quarterly. The failure to repay said loan upon
demand shall be a default.
Each Participant hereby grants to the other a lien upon its interest in the
Properties and a security interest in its rights under this Agreement and
in its Participating Interest in other Assets, and the proceeds therefrom,
to secure any loan made hereunder, including interest thereon, reasonable
attorneys' fees and all other reasonable costs and expenses incurred in
recovering the loan with interest and in enforcing such lien or security
interest, or both.
A non-defaulting Participant may elect the applicable remedy under this
Section 6.6, or, to the extent a Participant has a lien or security
interest under applicable law, it shall be entitled to its rights and
remedies at law and in equity. All such remedies shall be
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cumulative. The election of one or more remedies shall not waive the
election of any other remedies.
Each Participant hereby irrevocably appoints the other its attorney-in-fact
to execute, file and record all instruments necessary to perfect or
effectuate the provisions hereof.
6.7 CONVERSION OF INTEREST
If at any time the Participating Interest of a Participant is reduced to
ten percent (10%) or less by an affirmative election not to contribute all
or some portion of its share pursuant to a Program and Budget as provided
in Article 9, the diluted Participant shall be deemed to have withdrawn
from the Venture and this Agreement shall terminate; provided, however, the
diluting Participant shall have the right to receive through the 2.5% Net
Smelter Return Royalty, as set out in Schedule C, and not from any other
source, an amount equal to one hundred and fifteen percent (115%) of the
diluting Participant's actual or deemed expenditures contributed hereunder,
whichever expenditure is greater. Upon receipt of such amount the diluting
Participant shall thereafter have no further right, title, or interest
under this Agreement or in the Assets.
6.8 CONTINUING LIABILITIES UPON ADJUSTMENTS OF PARTICIPATING INTERESTS
Any reduction of a Participant's Participating Interest under this Section
6 shall not relieve such Participant of its share of any liability, whether
it accrued before or after such reduction, arising out of Operations
conducted prior to such reduction. For purposes of this Article 6, such
Participant's share of such liability shall be equal to its Participating
Interest at the time such liability was incurred.
The increased Participating Interest accruing to a Participant as a result
of the reduction of the other Participant's Participating Interest shall be
free of royalties, liens or other encumbrances arising by, through or under
such other Participant, other than those existing at the time the
Properties was acquired or those to which both Participants have given
their written consent.
An adjustment to a Participating Interest need not be evidenced during the
term of this Agreement by the execution and recording of appropriate
instruments, but each Participant's Participating Interest shall be shown
in the books of the Manager. Either Participant, however, at any time upon
the request of the other Participant, shall execute and acknowledge
instruments necessary to evidence such adjustment in form sufficient for
recording in the jurisdiction where the Properties is located.
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ARTICLE 7. - MANAGEMENT COMMITTEE
7.1 ORGANIZATION AND COMPOSITION
Prior to completion of TMC's Earn-In and the election by AM and TMC to
participate in the Venture as provided in Section 6.2, the Participants
shall establish a Management Committee to determine overall policies,
objectives, procedures, methods and actions under this Agreement. The
Management Committee shall consist of one member appointed by TMC and one
member appointed by AM. Each Participant may appoint one or more alternates
to act in the absence of a regular member. Any alternate so acting shall be
deemed a member. Appointments shall be made or changed by notice in writing
to the other participant.
7.2 DECISIONS
Prior to completion of TMC's Earn-In, each Participant, acting through its
appointed member(s) shall have an equal vote. In the event of a deadlock,
the Manager shall hold the deciding vote. After completion of TMC's
Earn-In, each Participant shall have a vote equal to its Participating
Interest in the Venture. Decisions of the Management Committee shall be
decided by Simple Majority of the Participating Interests.
7.3 MEETINGS
The Management Committee shall hold regular meetings at least quarterly at
mutually agreed places. The Manager shall give thirty (30) days' written
notice to the Participant's of such regular meetings. In addition, either
Participant may call a special meeting upon thirty (30) days' written
notice to the Manager and the other Participant. In case of emergency,
reasonable notice of a special meeting shall suffice. There shall be a
quorum if at least one member representing each Participant is present. The
Management Committee shall not transact any business at a meeting unless a
quorum is present at the commencement of the meeting. If a quorum is not
present at the commencement of the meeting, or within half an hour after
the time fixed for the meeting to commence, the meeting shall be adjourned
to the same time and day of the next week. If a quorum is not present at
the commencement of the adjourned meeting, one representative shall be
deemed to be a quorum.
Each notice of a meeting shall include an itemized agenda and detailed
back-up information prepared by the Manager in the case of a regular
meeting, or by the Participant calling the meeting in the case of a special
meeting, but any matters may be considered with the consent of all
Participants. The Manager shall prepare minutes of all meetings of all
meetings and shall distribute copies of such minutes to the Participants
within thirty (30 days after the meeting.
The minutes, when signed by all Participants, shall be the official record
of the decisions made by the Management Committee and shall be binding on
the Manager and the Participants. If personnel employed in Operations are
required to attend a Management
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Committee meeting, reasonable costs incurred in connection with such
attendance shall be a Venture cost. All other costs shall be paid by the
Participants individually.
7.4 ACTION WITHOUT MEETING
In lieu of meetings, the Management Committee may hold telephone
conferences, so long as all decisions are immediately confirmed in writing
by the Participants.
7.5 MATTERS REQUIRING APPROVAL
Except as otherwise delegated to the Manager in Section 8.2, the Management
Committee shall have exclusive authority to determine all management
matters to this Agreement.
ARTICLE 8. - MANAGER
8.1 APPOINTMENT
Following signing of this Agreement, TMC shall be the initial Manager.
8.2 POWERS AND DUTIES OF THE MANAGER
(i) The Manager shall manage, direct and control Operations.
(ii) The Manager shall implement the decisions of the Management Committee,
shall make all expenditures necessary to carry out adopted Programs
and Budgets, and shall promptly advise the Management Committee if it
lacks sufficient funds to carry out its responsibilities under this
Agreement.
(iii) The Manager shall:
(a) purchase or otherwise acquire all material, supplies, equipment,
water, utility and transportation services required for
Operations, such purchases and acquisitions to be made on the
best terms available, taking into account all of the
circumstances;
(b) obtain such customary warranties and guarantees as are available
in connection with such purchases and acquisitions; and
(c) keep the Assets free and clear of all liens and encumbrances,
except for those existing at the time of, or created concurrent
with, the acquisition of such Assets, or mechanic's or
materialmen's liens which shall be released or discharged in a
diligent manner, or liens and encumbrances specifically approved
by the Management Committee.
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(iv) The Manager shall conduct such title examinations and cure such title
defects as may be advisable in the reasonable judgment of the Manager.
(v) The Manager shall:
(a) make or arrange for all payments required by leases, licenses,
permits, contracts and other agreements related to the Assets;
(b) pay all taxes, assessments and like charges on Operations and
Assets except taxes determined or measured by a Participant's
sales revenue or net income. If authorized by the Management
Committee, the Manager shall have the right to contest in the
courts or otherwise, the validity or amount of any taxes,
assessments or charges if the Manager deems them to be unlawful,
unjust, unequal or excessive, or to undertake such other steps or
proceedings as the Manager may deem reasonably necessary to
secure a cancellation, reduction, readjustment or equalization
thereof before the Manager shall be required to pay them, but in
no event shall the Manager permit or allow title to the Assets to
be lost as the result of the nonpayment of any taxes, assessments
or like charges; and
(c) shall do all other acts reasonably necessary to maintain the
Assets.
(vi) The Manager shall:
(a) apply for all necessary permits, licenses and approvals;
(b) comply with applicable federal, provincial, municipal and local
laws and regulations;
(c) notify promptly the Management Committee of any allegations of
substantial violation thereof; and
(d) prepare and file all reports or notices required for Operations.
The Manager shall not be in breach of this provision if a
violation has occurred in spite of the Manager's good faith
efforts to comply, and the Manager has timely cured or disposed
of such violation through performance, or payment of fines and
penalties.
(vii) The Manager shall prosecute and defend, but shall not initiate
without consent of the Management Committee, all litigation or
administrative proceedings greater than fifty thousand dollars
($50,000) arising out of Operations. The non-managing Participant
shall have the right to participate, at its own expense, in such
litigation or administrative proceedings. The non-managing
Participant's approval shall be required in advance of any settlement
involving payments, commitments or obligations, if the non-managing
Participant's share is in excess of twenty-five thousand dollars
($25,000) in cash or value.
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(viii) The Manager shall provide insurance for the benefit of the
Participants as provided in Schedule D.
(ix) The Manager may dispose of Assets, whether by release, abandonment,
surrender or Transfer in the ordinary course of business, except that
Properties may be released, abandoned or surrendered only as provided
in Article 13. Without prior authorization from the Management
Committee, however, the Manager shall not:
(a) dispose of Assets in any one transaction having a value in excess
of $250,000:
(b) enter into any sales contracts or commitments for Product, except
as permitted in Section 11.2;
(c) begin a liquidation of the Venture; or
(d) dispose of all or a substantial part of the Assets necessary to
achieve the purposes of the Venture.
(x) The Manager shall have the right to carry out its responsibilities
hereunder through agents, affiliates or independent contractors.
(xi) The Manager shall be obligated to perform or cause to be performed
during the term of this Agreement all obligations required by law in
order to maintain the Properties which obligations shall be included
in Programs and Budgets.
(xii) The Manager shall keep and maintain all required accounting and
financial records pursuant to the Accounting Procedure and in
accordance with customary cost accounting practices in the mining
industry.
(xiii) The Manager shall keep the Management Committee advised of all
Operations by submitting in writing to the Management Committee:
(a) monthly progress reports which include statements of expenditures
and comparisons of such expenditures to the adopted Budget;
(b) periodic summaries of data acquired;
(c) copies of reports concerning Operations;
(d) a detailed final report within forty-five (45) days after
completion of each Program and Budget, which shall include
comparisons between actual and budgeted expenditures and
comparisons between the objectives and results of Programs; and
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(e) such other reports as the Management Committee may reasonably
request.
At all reasonable times the Manager shall provide the Management
Committee or the representative of any Participant, upon the request
of any member of the Management Committee, access to, and the right to
inspect and copy all maps, drill logs, core tests, reports, surveys,
assays, analyses, production reports, operations, technical,
accounting and financial records, and other information acquired in
Operations. In addition, the Manager shall allow the non-managing
Participant, at the latter's sole risk and expense, and subject to
reasonable safety regulations, to inspect the Assets and Operations at
all reasonable times, so long as the inspecting Participant does not
unreasonably interfere with Operations.
(xiv) The Manager shall undertake all other activities reasonably necessary
to fulfill the foregoing.
(xv) The Manager shall not be in default of any duty under this Section 8.2
if its failure to perform results from the failure of the non-managing
Participant to perform acts or to contribute amounts required of it by
this Agreement.
8.3 STANDARD OF CARE
The Manager shall conduct all Operations in a good, workmanlike and
efficient manner, in accordance with all applicable laws, sound mining and
other applicable industry standards and practices, and in accordance with
the terms and provisions of leases, licenses, permits, contracts and other
agreements pertaining to Assets. The Manager shall not be liable to the
non-managing Participant for any act or omission resulting in damage or
loss except to the extent caused by, or attributable to, the Manager's
willful misconduct or gross negligence.
8.4 RESIGNATION - DEEMED OFFER TO RESIGN
The Manager may resign upon thirty (30) days' prior notice to the other
Participant. If any of the following shall occur, the Manager shall be
deemed to have offered to resign, which offer shall be accepted by the
other Participant, if at all, within ninety (90) days following such deemed
offer:
(i) the Participating Interest of the Manager becomes less than fifty
percent (50%); or
(ii) the Manager fails to perform a material obligation imposed upon it
under this Agreement and such failure continues for a period of thirty
(30) days after written notice from the other Participant demanding
performance; or
(iii) the Manager fails to pay or contest in good faith its bills within
thirty (30) days after receiving written notice that they are due; or
(iv) a receiver, liquidator, assignee, custodian, trustee, sequestrator or
similar official for
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a substantial part of its assets is appointed and such appointment is
neither made ineffective nor discharged within sixty (60) days after
receiving written notice of the making thereof, or such appointment is
consented to, requested by, or acquiesced in by the Manager; or
(v) the Manager commences a voluntary case under any applicable
bankruptcy, insolvency or similar law now or hereafter in effect; or
consents to the entry of an order for relief in an involuntary case
under any such law or to the appointment of or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator or
other similar official of any substantial part of its assets; or makes
a general assignment for the benefit of creditors; or fails generally
to pay its or Venture debts as such debts become due; or takes
corporate or other action in furtherance of any of the foregoing; or
(vi) entry is made against the Manager of a judgment, decree or order for
relief affecting a substantial part of its assets by a court of
competent jurisdiction in an involuntary case commenced under any
applicable bankruptcy, insolvency or other similar law of any
jurisdiction now or hereafter in effect.
8.5 PAYMENTS TO MANAGER
The Manager shall be compensated for its services and reimbursed for its
costs hereunder in accordance with the Accounting Procedure.
8.6 TRANSACTIONS WITH AFFILIATES
If the Manager engages Affiliates to provide services hereunder, it shall
do so on terms no more favorable than would be the case with unrelated
persons in arm's-length transactions.
8.7 ACTIVITIES DURING DEADLOCK
If the Management Committee for any reason fails to adopt a Program and
Budget, subject to the contrary direction of the management Committee and
to the receipt of necessary funds, the Manager shall continue Operations at
levels comparable with the last adopted Program and Budget. For Purposes of
determining the required contributions of the Participants and their
Participating Interests, the last adopted Program and Budget shall be
deemed extended.
ARTICLE 9. - PROGRAMS AND BUDGETS
9.1 INITIAL PROGRAM AND BUDGET
The initial Program and Budget will be provided by the Management Committee
within ninety (90) days of TMC's Earn-In.
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9.2 OPERATIONS PURSUANT TO PROGRAMS AND BUDGETS
Except as otherwise provided in Section 9.8 and Article 16. Operations
shall be conducted, expenses shall be incurred, and Assets shall be
acquired only pursuant to approved Programs and Budgets.
9.3 PRESENTATION OF PROGRAMS AND BUDGETS
Proposed Programs and Budgets shall be prepared by the Manager for a period
of up to one year. Each adopted Program and Budget, regardless of length,
shall be reviewed at least once a year at one of the quarterly meetings of
the Management Committee. During the period encompassed by any Program and
Budget for the succeeding period shall be prepared by the Manager and
submitted to the Management Committee.
9.4 REVIEW AND APPROVAL OF PROPOSED PROGRAMS AND BUDGETS
Within thirty (30) days after submission of a proposed Program and Budget
to the Management Committee, the Management Committee shall:
(i) approve the proposed Program and Budget; or
(ii) propose modifications of the proposed Program and Budget; or
(iii) reject the proposed Program and Budget.
If the Management Committee makes the elections pursuant to Section 9.4
(ii) or 9.4 (iii) then the Manager will review the modifications and/or any
recommendations of the Management Committee and will resubmit a Program and
Budget within thirty (30) days.
9.5 ELECTION TO PARTICIPATE
By written notice to the Management Committee within thirty (30) days after
approving a Program and Budget except as provided for in Section 6.1, a
Participant may elect to contribute to such Program and Budget in an amount
equal to its Participating Interest or a lesser amount as provided for in
Section 6.5. If a Participant fails to so notify the Management Committee,
the Participant shall be deemed to have elected not to contribute to such
Program and Budget and the provisions of Section 6.4 shall apply. Subject
to Section 9.6 if a Participant elects not to participate in the Program
and Budget and the other Participant elects to contribute to the Program
and Budget the provisions of Section 6.5 shall apply.
9.6 DEADLOCK ON PROPOSED PROGRAMS AND BUDGETS
If the Participants, acting through the Management Committee, fail to
approve a program and Budget by the beginning of the period to which the
proposed Program and Budget
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applies, the provisions of Section 8.7 shall apply
9.7 BUDGET AND OVERRUNS - PROGRAM CHANGES
The Manager shall immediately notify the Management Committee of any
material departure from an adopted Program and Budget. If the Manager
exceeds an adopted Budget by more than ten percent (10%), then such excess
over ten percent (10%) shall be for the sole account of the manager, not
creditable to the calculation of Participating Interests, unless such
excess amount is directly caused by an emergency or unexpected expenditure
made pursuant to Section 9.8, or is otherwise authorized by the approval of
the Management Committee. Budget overruns of ten percent (10%), or less,
shall be borne by the Participants in proportion to their respective
Participating Interests as of the time the overrun occurs.
9.8 EMERGENCY OR UNEXPECTED EXPENDITURES
In case of emergency, the Manager may take any reasonable action it deems
necessary to protect life, limb or property, to protect the Assets or to
comply with law or government regulation. The Manager may also make
reasonable expenditures for unexpected events which are beyond its
reasonable control and which do not result from a breach by it of its
standard of care. The Manager shall promptly notify the Participants of the
emergency or unexpected expenditures, and the Manager shall be reimbursed
for all resulting costs by the Participants in proportion to their
respective Participating Interests at the time the emergency or unexpected
expenditures are incurred.
ARTICLE 10. - ACCOUNTS AND SETTLEMENTS
10.1 MATTERS OF ACCOUNTS AND SETTLEMENTS
These items shall be governed by the provisions in Schedule B (Accounting
Procedures) attached hereto.
ARTICLE 11. - DISPOSITION OF PRODUCTION
11.1 TAKING IN KIND
Each Participant shall take in Kind or separately dispose of its share of
all Products in accordance with its Participating Interest. Any extra
expenditure incurred in the taking in kind or separate disposition by any
Participant of its proportionate share of Products shall be borne by such
Participant. Nothing in this Agreement shall be construed as providing,
directly or indirectly, for any joint or co-operative marketing or selling
of its Products or permitting the processing of Products of any parties
other than the Participants at any processing facilities constructed by the
Participants pursuant to this Agreement. The
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Manager shall give the Participants notice at least ten (10) days in
advance of the delivery date upon which their respective shares of Products
will be available.
11.2 FAILURE OF PARTICIPANT TO TAKE IN KIND
If a participant fails to take in kind, the Manager shall have the right,
but not the obligation, for a period of time consistent with the minimum
needs of the industry, but not to exceed one year, to purchase the
Participant's share for its own account or to sell such share as agent for
the Participant at not less than the prevailing market price in the area.
Subject to the terms of any such contracts of sale then outstanding, during
any period that the Manager is purchasing or selling a Participant's share
of production, the Participant may elect by notice to the Manager to take
in kind. The Manager shall be entitled to deduct from proceeds of any sale
by it for account of a Participant reasonable expenses incurred in such a
sale.
ARTICLE 12. - WITHDRAWAL AND TERMINATION
12.1 TERMINATION BY EXPIRATION OR AGREEMENT
This Agreement shall terminate as expressly provided in this Agreement,
unless earlier terminated by written agreement.
12.2 WITHDRAWAL
A Participant may elect to withdraw as a participant from this Agreement by
giving notice to the other Participant of the effective date of withdrawal,
which shall be the alter of the then current Program and Budget or at least
forty-five (45) days after the date of the notice. Upon such withdrawal,
this Agreement shall terminate, and the withdrawing Participant shall be
deemed to have transferred to the remaining Participant, without cost and
free and clear of royalties, liens or other encumbrances arising by,
through or under such withdrawing Participant, except those exceptions to
title described in Schedules F and G and those to which both Participants
have given their written consent after the date of this Agreement, all of
its Participating Interest in the Assets and in this Agreement. Any
withdrawal under this Section 12.2 shall not relieve the withdrawing
Participant of its share of liabilities to third persons (whether such
accrues before or after such withdrawal) arising out of Operations
conducted prior to such withdrawal. For purposes of this Section 12.2, the
withdrawing Participant's share of such liabilities shall be equal to its
Participating Interest at the time such liability was incurred.
12.3 CONTINUING OBLIGATIONS
On termination of this Agreement under Section 12.1 or 12.2, the
Participants shall remain liable for continuing obligations hereunder until
final settlement of all accounts and for any liability, whether it accrues
before or after termination, if it arises out of Operations during the term
of the Agreement.
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12.4 DISPOSITION OF ASSETS ON TERMINATION
Promptly after termination under Section 12.1, the Manager shall take all
action necessary to wind up the activities of the Venture, and all costs
and expenses incurred in connection with the termination of the Venture
shall be expenses chargeable to the Venture. Any Participant that has a
negative Joint Account balance when the Venture is terminated for any
reason shall contribute to the Assets of the Venture an amount sufficient
to raise such balance to zero. The Assets shall first be paid, applied, or
distributed in satisfaction of all liabilities of the Venture to third
parties and then to satisfy any debts, obligations, or liabilities owed to
the Participants. Before distributing any funds or Assets to Participants,
the Manager shall have the right to segregate amounts, which, in the
Manager's reasonable judgment, are necessary to discharge continuing
obligations, or to purchase for the account of Participants, bonds or other
securities for the performance of such obligations. The foregoing shall not
be construed to include the repayment of any Participant's contributions or
Joint Account balance. Thereafter, any remaining cash and all other Assets,
including property shall be distributed (in undivided interests unless
otherwise agreed) to the Participants, first in the ratio and to the extent
of their respective Joint Accounts and then in proportion to their
respective Participating Interests, subject to any dilution, reduction, or
termination of such Participating Interests as may have occurred pursuant
to the terms of this Agreement. No Participant shall receive a distribution
of any interest in Products or proceeds from the sale thereof if such
Participant's Participating Interest therein has been terminated pursuant
to this Agreement.
12.5 RIGHT TO DATA AFTER TERMINATION
After termination of this Agreement pursuant to Section 12.1, each
Participant shall be entitled to copies of all information acquired
hereunder before the effective date of termination not previously furnished
to it, but a terminating or withdrawing Participant shall not be entitled
to any such copies in respect to a later termination or withdrawal.
12.6 CONTINUING AUTHORITY
On termination of this Agreement under Section 12.1 or the deemed
withdrawal of a Participant pursuant to Sections 5.2 and 6.4, the Manager
shall have the power and authority, subject to control of the Management
Committee, if any, to do all things on behalf of the Participants which are
reasonably necessary or convenient to:
(i) wind up Operations; and
(ii) complete any transaction and satisfy any obligation, unfinished or
unsatisfied, at the time of such termination or withdrawal, if the
transaction or obligation arises out of Operations prior to such
termination or withdrawal. The Manager shall have the power and
authority to grant or receive extensions of time or change the method
of payment of an already existing liability or obligation, prosecute
and defend actions on behalf of the Participants and the Venture,
mortgage Assets,
Aurora-Trend Stillwater Venture Page 26 of 35 January 26, 2005
and take any other reasonable action in any matter with respect to
which the former Participants continue to have, or appear, or are
alleged to have, a common interest or a common liability.
12.7 NON-COMPETE COVENANTS
A Participant that withdraws pursuant to Section 12.2, or is deemed to have
withdrawn pursuant to Sections 6.2 or 6.7 shall not directly or indirectly
acquire any interest in property within the Area of Interest for two (2)
years after the effective date of withdrawal. If a withdrawing Participant,
or an Affiliate of a withdrawing Participant, breaches this Section 12.7,
such Participant of Affiliate shall be obligated to offer to convey to the
non-withdrawing Participant, without cost, any such property or interest so
acquired. Such offer shall be made in writing and can be accepted by the
non-withdrawing Participant at any time within forty-five (45) days after
it is received by such non-withdrawing Participant.
12.8 MUTUAL WITHDRAWAL
If a Participant elects to withdraw from this Agreement pursuant to Section
12.2, the other Participant may also elect to withdraw as a Participant by
giving written notice thereof to the other Participant within thirty (30)
days after receipt of the first Participant's notice of withdrawal, in
which event the Participants shall be deemed to have agreed to terminate
the Venture as of the first date of withdrawal pursuant to Section 12.1.
12.9 RIGHTS TO DATA AFTER TERMINATION
After termination of this Agreement pursuant to Sections 12.1 or 12.2,
project data shall be distributed as follows:
(i) all proprietary data provided by AM covering data on the Properties
and other Stillwater Complex lands and all copies thereof will be
returned to AM within thirty (30) days of the termination date. These
data include geological and related documentation, records, reports
and information provided by the lessors signatories to Schedules A-1
and A-2; and
(ii) copies, including but not limited to, of any and all raw data
developed by TMC about or on the Properties, any geological data,
computer generated data, notes, summaries, maps, surveys, assays,
drill hole logs or other documentation generated by TMC during the
life of the Venture will be provided to AM.
Aurora-Trend Stillwater Venture Page 27 of 35 January 26, 2005
ARTICLE 13. - SURRENDER OF PROPERTIES
13.1 SURRENDER OF PROPERTIES
The Management Committee may authorize the Manager to surrender part or all
of the Properties. If the Management Committee authorizes any such
surrender over the objection of a Participant, the Participant that desires
to surrender shall assign to the objecting Participant, without cost to the
objecting Participant, all of the surrendering Participant's interest in
the properties to be surrendered, and the surrendered Properties shall
cease to be part of the Properties.
13.2 RE-ACQUISITION
If any properties are surrendered under the provisions of this Article 13.,
then, unless this Agreement is terminated earlier, neither Participant nor
any Affiliate thereof shall acquire any interest in such Properties or a
right to acquire such Properties for a period of two years following the
date of such surrender. If a Participant re-acquires any properties in
violation of this Section 13.2, the other participant may elect by notice
to the re-acquiring Participant within forty-five (45) days after it has
actual notice of such re-acquisition, to have such Properties made subject
to the terms of this Agreement. In the event such an election is made, the
re-acquired properties shall thereafter be treated as Properties, and the
costs of re-acquisition shall be borne pro rata by the participants and
shall be included for purposes of calculating the Participants' respective
Participating Interests.
ARTICLE 14. - TRANSFER OF INTEREST
14.1 GENERAL
A Participant shall have the right to Transfer to any third party all or
any part of its interest in or to this Agreement, its Participating
Interest, or the Assets solely as provided in this Article 14 and subject
to the Underlying Agreements.
14.2 LIMITATIONS ON FREE TRANSFERABILITY
The transfer of a Participant in Section 14.1 shall be subject to the
following terms and conditions:
(i) no transferee of all or any part of the interest of a Participant in
this Agreement, any Participating Interest, or the Assets shall have
the rights of a Participant unless and until the transferring
Participant has provided to the other Participant notice of the
Transfer, and except as provided in Sections 14.2(iii) and 14.2(vi),
the transferee, as of the effective date of the Transfer, has
committed in writing to be bound by this Agreement to the same extent
as the transferring Participant;
Aurora-Trend Stillwater Venture Page 28 of 35 January 26, 2005
(ii) no Transfer permitted by this Article 14 shall relieve the
transferring Participant of its share of any liability, whether
accruing before or after such Transfer, which arises out of Operations
conducted prior to such Transfer;
(iii) in the event of a Transfer of less than all of a Participating
Interest, the transferring Participant and its transferee shall act
and be treated as one Participant;
(iv) except as provided in Section 14.4 (iii), no Participant shall
transfer any interest in this Agreement or the Assets except by
Transfer of part or all of its Participating Interest;
(v) from the date of execution of this Agreement, if the Transfer is the
grant of a security interest by mortgage, deed of trust, pledge, lien
or other encumbrance of any interest in this Agreement, any
Participating Interest or the Assets to secure a loan or other
indebtedness of a Participant in a bona fide transaction, such
security interest shall be subordinate to the terms of this Agreement
and the rights and interests of the other Participant hereunder. Upon
any foreclosure or other enforcement of rights in the security
interest the acquiring third party shall be deemed to have assumed the
position of the encumbering Participant with respect to this Agreement
and the other Participant, and it shall comply with and be bound by
the terms and conditions of this Agreement;
(vi) if a sale or other commitment or disposition of Products or proceeds
from the sale of Products by a Participant upon distribution to it
pursuant to Article 11 creates in a third party a security interest in
Products or proceeds therefrom prior to such distribution, such sales,
commitment or disposition shall be subject to the terms and conditions
of this Agreement; and
(vi) no Participant, without the consent of the other participant, shall
make a transfer which shall cause termination of the tax partnership
established by the provisions of Section 4 2.
14.3 RIGHT OF FIRST REFUSAL
Except as otherwise provided in Section 14.4, if either Participant
receives an offer to transfer or otherwise dispose of all or a part of its
Participating Interest in the Venture and/or Assets to a third party,
including AM's one hundred percent (100%) interest in the "G" and "H"
Chromites and the nickel-copper-cobalt mineralization in the ▇▇▇ Basin not
subject to this Joint Venture, prior to accepting such offer the
transferring Participant shall first offer the interest to the
non-transferring Participant at the same terms and conditions as set forth
in the third party offer. The non-transferring Participant may accept the
offer by written notice to the transferring Participant given within sixty
(60) days of receipt of the transferring Participant's offer. If the
non-transferring Participant does not accept the offer, then the
transferring Participant may sell or otherwise dispose of its interest
under terms and conditions not less favorable to it than those set forth in
the
Aurora-Trend Stillwater Venture Page 29 of 35 January 26, 2005
third party offer, provided that the sale or other disposition is
effectuated within one hundred and eighty (180) days from the effective
date of the third party offer.
14.4 EXCEPTIONS TO RIGHT OF FIRST REFUSAL
Section 14.3 shall not apply to the following:
(i) transfer by a Participant of all or any part of its interest in this
Agreement, any Participating Interest, or the Assets to an Affiliate:
(ii) incorporation of a Participant, or corporate merger, consolidation,
amalgamation or reorganization of a Participant by which the surviving
entity shall possess substantially all of the stock, or all of the
property rights and interests, and be subject to substantially all of
the liabilities and obligations of that Participant;
(iii) the grant by a Participant of a security interest in any interest in
this Agreement, any Participating Interest, or the Assets by mortgage,
deed of trust, pledge, lien or other encumbrance which shall be
subordinate as set forth above; or
(iv) a sale or other commitment or disposition of Products or proceeds from
sale of Products by a Participant upon distribution to it pursuant to
Article 11.
ARTICLE 15. - CONFIDENTIALITY AND RELEASES
15.1 GENERAL
The financial terms of this Agreement and all information obtained in
connection with the performance of this Agreement are valuable trade
secrets and shall be the exclusive property of the Participants and shall
be maintained on a confidential basis. Neither Participant shall make any
disclosure to any third party or the public or give out any publicity,
press release or written material relating to confidential information, the
Venture or the terms of this Agreement without the prior written consent of
the other Participant, which consent shall not be unreasonably withheld.
15.2 EXCEPTIONS
The consent required by Section 15.1 shall not apply to a disclosure:
(i) to an Affiliate, consultant, contractor or subcontractor that has a
bona fide need to be informed;
(ii) to any third party to whom the disclosing Participant contemplates a
Transfer of all or any part of its interest in or to this Agreement,
its Participating Interest, or the Assets; or
Aurora-Trend Stillwater Venture Page 30 of 35 January 26, 2005
(iii) which the disclosing Participant is required by pertinent law or
regulation or the rules of any stock exchange to disclose; provided
that in any case to which this Section 15.2 is applicable, the
disclosing Participant shall give written notice to the other
Participant prior to the making of any such disclosure; or
(iv) as necessary to administer or enforce this Agreement.
As to any disclosure pursuant to Section 15.2(i) or (ii), only such
confidential information as such third party shall have a legitimate
business need to know shall be disclosed and such third party shall first
agree in writing to protect the confidential information from further
disclosure to the same extent as the Participants are obligated under this
Article 15.
15.3 DURATION OF CONFIDENTIALITY
The provision of this Article 15. shall apply during the term of this
Agreement and for two (2) years following a termination pursuant to Section
12.1 or following withdrawal pursuant to Section 12.2, and shall continue
to apply to any Participant who withdraws, who is deemed to have withdrawn,
or who Transfers its Participating Interest, for two (2) years following
the date of such occurrence.
ARTICLE 16. - AREA OF INTEREST
16.1 ACQUISITIONS IN AREA OF INTEREST
If at any time during the existence of this Agreement any Participant or
any former Participant that has a production royalty interest as provided
for herein, (in this section only, called the "Acquiring Party") stakes or
otherwise acquires any right to or interest in any properties within the
Area of Interest, the Acquiring Party shall forthwith give notice to the
other Participant(s) of such acquisition, the total cost of such
acquisition, the total cost thereof and all details in the possession of
that Participant with respect to the details of the acquisition, the nature
of the property and the known mineralization. Each other Participant may,
within thirty (30) days of receipt of the Acquiring Party's notice, elect,
by notice to the Acquiring Party, to require that the properties and the
right or interest acquired be held equally by the parties and be included
in and thereafter form part of the Properties for all purposes of this
Agreement.
In the event properties or interests in properties are acquired by an
Acquiring Party through a joint venture in the Area of Interest after the
Effective Date of this Agreement, any such acquired properties or interest
in acquired properties, shall be held equally by TMC and AM unless
otherwise agreed.
If the election aforesaid is made, the other Participants shall reimburse
the Acquiring Party for that portion of the cost of acquisition which is
equivalent to their respective Participating Interests. If no other
participant makes the election aforesaid within that
Aurora-Trend Stillwater Venture Page 31 of 35 January 26, 2005
period of thirty (30) days, the right or interest acquired shall not form
part of the Properties and the Acquiring Party shall be solely entitled
thereto.
ARTICLE 17. - GENERAL PROVISIONS
17.1 NOTICES
All notices, payments and other required communications ("Notices") to the
Participants shall be in writing, and shall be addressed respectively as
follows:
(i) If to TMC:
Trend Mining Company,
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇.▇.▇. ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇- ▇▇▇-▇▇▇▇
(ii) If to AM:
Aurora Metals (BVI) Limited,
▇.▇. ▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇.▇.▇. ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇.▇. ▇▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
All Notices shall be given:
(a) by personal delivery to the Participant, or
(b) by electronic communication or facsimile, with a confirmation sent by
registered or certified mail return receipt requested, or
(c) by registered or certified mail return receipt requested; or
(d) by express mail.
All Notices shall be effective and shall be deemed delivered:
Aurora-Trend Stillwater Venture Page 32 of 35 January 26, 2005
a. if by personal delivery on the date of delivery if delivered during
normal business hours, and, if not delivered during normal business
hours, on the next business day following delivery, and/or
b. if by electronic communication or facsimile on the next business day
following receipt of the electronic communication or facsimile, and/or
c. if solely by mail on the next business day after actual receipt.
A Participant may change its address by Notice to the other Participant.
17.2 WAIVER
The Failure of a Participant to insist on the strict performance of any
provision of this Agreement or to exercise any right, power or remedy upon
a breach hereof shall not constitute a waiver of any provision of this
Agreement or limit the Participant's right thereafter to enforce any
provision or exercise any right.
17.3 MODIFICATION
No modification of this Agreement shall be valid unless made in writing and
duly executed by the Participants.
17.4 FORCE MAJEURE
Except for the obligation to make payments when due hereunder, the
obligations of a Participant shall be suspended to the extent, and for the
period, that performance is prevented by any cause, whether foreseeable or
unforeseeable, beyond its reasonable control, including, without
limitation, lack of satisfactory market, labor disputes (however arising
and whether, or not, employee demands are reasonable or within the power of
the Participant to grant); acts of God; laws, regulations, orders,
proclamations, instructions or requests of any government or governmental
entity; judgements or orders of any court; inability to obtain on
reasonably acceptable terms any public or private license, permit or
alleged, present or prospective violation of federal, provincial or local
environmental standards; acts of war or conditions arising out of or
attributable to war, whether declared or undeclared; riot, civil strife,
insurrection or rebellion; fire, explosion, earthquake, storm, flood, sink
holes,; drought or other adverse weather conditions; delay or failure by
suppliers or transporters of materials, parts, supplies, services or
equipment or by contractors' or subcontractors' shortage of, or inability
to obtain, labor, transportation, materials, machinery, equipment,
supplies, utilities or services; accidents; breakdown of equipment,
machinery or facilities; or any other cause whether similar or dissimilar
to the foregoing.
The affected Participant shall promptly give notice to the other
Participant of the suspension of performance, stating therein the nature of
the suspension, the reasons therefor, and the expected duration thereof and
this Agreement shall be extended by the total period of such delays or
suspension. The affected Participant shall resume performance as soon as
Aurora-Trend Stillwater Venture Page 33 of 35 January 26, 2005
reasonably possible. During the period of suspension the obligations of the
Participants to advance funds pursuant to Section 9.2 shall be reduced to
levels consistent with Operations.
17.5 ECONOMIC FORCE MAJEURE
Following the Earn-In Period and if at any time after the Management
Committee reaches a determination, in its reasonable judgment, that the
minerals encompassed within the Properties cannot be profitably mined under
the terms and conditions of this Agreement as it is then in effect, the
Management Committee may declare that a condition of Force Majeure exists
as provided in Section 17.4 above; provided, that in no event shall a
condition of Force Majeure declared pursuant to this Section 17.5 be in
effect for more than five (5) consecutive years.
17.6 GOVERNING LAW
This Agreement shall be governed by and interpreted in accordance with the
laws of the State of Colorado.
17.7 RULE AGAINST PERPETUITY
Any right or option to acquire any interest in real or personal property
under this Agreement must be exercised, if at all, so as to vest such
interest in the acquirer within twenty-one (21) years after the Effective
Date of this Agreement.
17.8 FURTHER ASSURANCES
Each of the Participants agrees, from time to time, to take such actions
and execute such additional instruments as may be reasonably necessary or
convenient to implement and carry out the intent and purpose of this
Agreement.
17.9 SURVIVAL OF TERMS AND CONDITIONS
The following Sections shall survive the termination of this Agreement to
the full extent necessary for their enforcement and the protection of the
Participant in whose favor they run. Sections 2.2, 4.3, 6.6, 6.8, 12.2,
12.3, 12.4, 12.7, 13.2, 17.6 and 1.3.3 of the Accounting Procedures.
17.10 ENTIRE AGREEMENT
This Agreement contains the entire understanding of the Participants and
supersedes all prior agreements and understandings between the Participants
relating to the subject matter hereof. This Agreement shall be binding upon
and inure to the benefit of the respective successors and permitted assigns
of the Participants. In the event of any conflict between this Agreement
and Schedules attached hereto, the Terms of this Agreement shall be
controlling.
Aurora-Trend Stillwater Venture Page 34 of 35 January 26, 2005
17.11 MEMORANDUM
At the request of either Participant, a Memorandum or short form of this
Agreement, as appropriate, which shall not disclose financial information
contained herein, shall be prepared and recorded by Manager. This Agreement
shall not be recorded.
17.12 FUNDS
All references to dollar amounts contained in this Agreement are references
to the currency of the United States of America.
Aurora-Trend Stillwater Venture Page 35 of 35 January 26, 2005
IN WITNESS HEREOF, this Agreement has been executed by the parties hereto
effective as of the day and year first above written.
AURORA METALS (BVI) LIMITED
By: /s/ ▇.▇.▇. ▇▇▇▇▇
----------------
▇▇▇▇ ▇.▇. ▇▇▇▇▇
Title: President and Director
TREND MINING COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President and Chief Executive Office
AURORA-TREND STILLWATER VENTURE
BASAL ZONE LEASE AGREEMENT
SCHEDULE A-1 - SCHEDULES OF CLAIMS ASSIGNMENT
------------------------------------------------------------------------------------------
SCHEDULE ▇-▇ - ▇▇▇▇▇▇▇▇ ▇ - ▇▇▇▇▇ ▇▇▇▇ LEASE AGREEMENT
PATENTED LODE AND PLACER CLAIMS IN STILLWATER COUNTY, MONTANA
------------------------------------------------------------------------------------------
TO BE
TO BE ASSIGNED TO
BLM RETAINED AURORA-
STATUS AND LOCATION WITH MONTANA BY TREND
REF. MINERAL CLAIM REFERENCE TO STILLWATER MINERAL CLAIM AURORA STILLWATER
NO. NAME RIVER NO. METALS VENTURE
------------------------------------------------------------------------------------------
▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
2 Chrome Patented ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
3 Lookover Patented East MSN 10781
▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
5 Gabbro Patented ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇ ▇▇▇▇ #▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇ ▇▇▇▇ #▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
9 Lucky T Patented East MSN 10782
10 L.T.X. Patented East MSN 10782
11 H.E.D. Patented East MSN 10782
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
14 Beauty Patented East MSN 10782
15 Patent Patented East MSN 10782
▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
18 Mountain View Patented West MSN 63A
19 Rough Rock Patented West MSN 63B
20 Redbird Patented West MSN 63C
21 Big Thing Patented West MSN 63D
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇
23 Summit Patented West MSN 68A
24 New Wabeliski Patented West MSN 68B
25 Brooklyn Patented West MSN 69A
26 Avalanche Patented West MSN 69B
27 Cataract Patented West MSN 69C
28 Perseverance Patented East MSN 70A
29 Emerald Patented East MSN 70B
30 Blue ▇▇▇ Patented East MSN 70C
31 Copper Bottom Patented East MSN 70D
32 Ridge Patented East MSN 70E
33 Rough Rock ▇▇. ▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇
34 Something Patented West MSN 72B
------------------------------------------------------------------------------------------
TOTALS 18 16
------------------------------------------------------------------------------------------
Aurora-Trend Stillwater Venture January 26, 2005
Basal Zone Lease Agreement Page 2 of 3 (Revised May 26, 2005)
Schedule A-1 - Claims Assignment
---------------------------------------------------------------------------------------------
SCHEDULE ▇-▇ - ▇▇▇▇▇▇▇▇ ▇ - ▇▇▇▇▇ ▇▇▇▇ LEASE AGREEMENT
UNPATENTED LODE AND PLACER CLAIMS IN STILLWATER COUNTY, MONTANA
---------------------------------------------------------------------------------------------
TO BE
ASSIGNED
TO BE TO
RETAINED AURORA-
STATUS AND LOCATION WITH BLM MONTANA BY TREND
REF. MINERAL CLAIM REFERENCE TO STILLWATER MINERAL CLAIM AURORA STILLWATER
NO. NAME RIVER NO. METALS VENTURE
---------------------------------------------------------------------------------------------
1 Giant Unpatented East MMC 36382
2 Red Bird #2 Unpatented West MMC 36396
3 Smelter Unpatented West MMC 36401
4 ▇▇▇▇▇▇ Unpatented West MMC 36407
5 Gap Unpatented West MMC 36410
6 ▇▇▇▇ Unpatented West MMC 36412
7 Westlake Unpatented West MMC 36431
8 Snookie Placer (1) (2) Unpatented East MMC 36402
9 Basin Placer (3) Unpatented East MMC 36777
---------------------------------------------------------------------------------------------
TOTALS 1.5 7.5
---------------------------------------------------------------------------------------------
(1) Stillwater Mining Company leases "that part (of the Snookie Placer) in
conflict with the unpatented lode claims ▇▇▇▇▇▇▇ Numbers 1 &2, Blitz
Numbers. 3, 4, 7, 8, 11,12,15, and 16."
(2) SMC is also paying BLM fees on this claim. (3) Northern half of claim
assigned.
---------------------------------------------------------------------------------------------
Aurora-Trend Stillwater Venture January 26, 2005
Basal Zone Lease Agreement Page 3 of 3 (Revised May 26, 2005)
Schedule A-1 - Claims Assignment
-------------------------------------------------------------------------------------
SCHEDULE ▇-▇ - ▇▇▇▇▇▇▇▇ ▇ - ▇▇▇▇▇ ▇▇▇▇ LEASE AGREEMENT
UNPATENTED LODE AND PLACER CLAIMS IN SWEET GRASS COUNTY, MONTANA (CRESCENT CREEK)
-------------------------------------------------------------------------------------
TO BE
BLM RETAINED TO BE
MONTANA BY ASSIGNED
REF. MINERAL CLAIM MINERAL CLAIM AURORA TO TREND
NO. NAME STATUS AND LOCATION NO. METALS MINING
-------------------------------------------------------------------------------------
1 RAM 1 Unpatented Crescent Creek MMC 128417
2 RAM 2 Unpatented Crescent Creek MMC 128418
3 RAM 4 Unpatented Crescent Creek MMC 128420
4 RAM 5 Unpatented Crescent Creek MMC 128421
5 RAM 7 Unpatented Crescent Creek MMC 128423
6 RAM 8 Unpatented Crescent Creek MMC 128424
7 RAM 11 Unpatented Crescent Creek MMC 128427
8 RAM 12 Unpatented Crescent Creek MMC 128428
9 RAM 14 Unpatented Crescent Creek MMC 128430
10 RAM ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
11 RAM ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
12 RAM ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
13 RAM ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
14 RAM ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
15 RAM ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
16 RAM ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
17 RAM ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
-------------------------------------------------------------------------------------
TOTALS 0 17
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
SUMMARY
-------------------------------------------------------------------------------------
SCHEDULE 1 PATENTED, STILLWATER COUNTY 18 16
SCHEDULE 2 UNPATENTED, STILLWATER COUNTY 1.5 7.5
SCHEDULE 3 UNPATENTED CRESCENT CREEK, SWEET GRASS 0 17
-------------------------------------------------------------------------------------
TOTALS 19.5 40.5
-------------------------------------------------------------------------------------
AURORA-TREND JOINT VENTURE
MOUNTAIN VIEW LEASE AGREEMENT
SCHEDULE A-2 SCHEDULE OF CLAIMS ASSIGNMENT
----------------------------------------------------------------------------------
SCHEDULE A-2 - SCHEDULE 1 - MOUNTAIN VIEW LEASE AGREEMENT
PATENTED LODE AND PLACER CLAIMS IN STILLWATER COUNTY, MONTANA
----------------------------------------------------------------------------------
TO BE
TO BE ASSIGNED
RETAINED TO AURORA-
STATUS AND LOCATION BY TREND
REF. MINERAL CLAIM WITH REFERENCE TO BLM MONTANA AURORA STILLWATER
NO. NAME STILLWATER RIVER MINERAL CLAIM NO. METALS VENTURE
----------------------------------------------------------------------------------
1 Bald Eagle Patented East MSN 69D
----------------------------------------------------------------------------------
TOTALS 1 0
----------------------------------------------------------------------------------
----------------------------------------------------------------------------------
SCHEDULE A-2 - SCHEDULE 2 - MOUNTAIN VIEW LEASE AGREEMENT
LODE AND PLACER CLAIMS FOR WHICH PATENT HAS BEEN APPLIED FOR IN STILLWATER COUNTY,
MONTANA
----------------------------------------------------------------------------------
TO BE
TO BE ASSIGNED
RETAINED TO AURORA-
BY TREND
REF. MINERAL CLAIM BLM MONTANA AURORA STILLWATER
NO. NAME STATUS MINERAL CLAIM NO. METALS VENTURE
----------------------------------------------------------------------------------
1 ▇▇▇ 19 Patent Applied For MMC 10209
2 ▇▇▇ 20 Patent Applied For MMC 10210
3 ▇▇▇ 21 Patent Applied For MMC 10211
4 SUSU 25 Patent Applied For MMC 53589
5 SUSU 28 Patent Applied For MMC 53592
6 SUSU 29 Patent Applied For MMC 53593
7 ▇▇▇▇▇ 1 Lode Patent Applied For MMC 186404
8 ▇▇▇▇▇ 2 Lode Patent Applied For MMC 186405
9 ▇▇▇▇▇ 3 Lode Patent Applied For MMC 186406
10 ▇▇▇▇▇ 4 Lode Patent Applied For MMC 186407
11 ▇▇▇▇▇ 5 Lode Patent Applied For MMC 186408
12 ▇▇▇▇▇ 6 Lode Patent Applied For MMC 186409
13 ▇▇▇▇▇ 7 Lode Patent Applied For MMC 186410
14 ▇▇▇▇▇ 8 Lode Patent Applied For MMC 186411
15 ▇▇▇▇▇ 9 Lode Patent Applied For MMC 186412
16 ▇▇▇▇▇ 10 Lode Patent Applied For MMC 186413
17 ▇▇▇▇▇ 11 Lode Patent Applied For MMC 186414
18 ▇▇▇▇▇ 12 Lode Patent Applied For MMC 186415
19 ▇▇▇▇▇ 13 Lode Patent Applied For MMC 186416
20 ▇▇▇▇▇ 14 Lode Patent Applied For MMC 186417
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Patent Applied For MMC 189232
----------------------------------------------------------------------------------
TOTALS 14 7
----------------------------------------------------------------------------------
Aurora-Trend Stillwater Venture January 26, 2005
Mountain View Lease Agreement Page 2 of 4 (Revised May 26, 2005)
Schedule A-2 - Claims Assignment
------------------------------------------------------------------------------------------
SCHEDULE A-2 - SCHEDULE 3 - MOUNTAIN VIEW LEASE AGREEMENT
UNPATENTED LODE AND PLACER CLAIMS IN STILLWATER COUNTY, MONTANA
------------------------------------------------------------------------------------------
TO BE
TO BE ASSIGNED
RETAINED TO AURORA-
STATUS AND LOCATION BY TREND
REF. MINERAL CLAIM WITH REFERENCE TO BLM MONTANA AURORA STILLWATER
NO. NAME STILLWATER RIVER MINERAL CLAIM NO. METALS VENTURE
------------------------------------------------------------------------------------------
1 ▇▇▇ 1 Unpatented West MMC 10191
2 ▇▇▇ 2 Unpatented West MMC 10192
3 ▇▇▇ 3 Unpatented West MMC 10193
4 ▇▇▇ 13 Unpatented West MMC 10203
5 ▇▇▇ 14 Unpatented West MMC 10204
6 ▇▇▇ 15 Unpatented West MMC 10205
7 ▇▇▇ 16 Unpatented West MMC 10206
8 ▇▇▇ 17 Unpatented West MMC 10207
9 ▇▇▇ 18 Unpatented West MMC 10208
10 ▇▇▇ 25 Unpatented West MMC 10212
11 ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
12 Gypsum Placer Unpatented Straddles MMC 35156
Unpatented West - 5/8th
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇. ▇▇ ▇▇▇▇▇▇▇▇▇. ▇▇▇ ▇▇▇▇▇
14 ▇▇▇ #1 Unpatented West MMC 35958
15 ▇▇▇ #2 Unpatented West MMC 35959
16 ▇▇▇ 3 fr. Unpatented West MMC 35960
17 ▇▇▇ 4 Unpatented West MMC 35961
18 ▇▇▇ 4A Unpatented West MMC 35962
19 ▇▇▇ 5 Unpatented West MMC 35963
20 ▇▇▇ 5A Unpatented West MMC 35964
21 ▇▇▇ 6 Unpatented West MMC 35965
22 ▇▇▇ 6A Unpatented West MMC 35966
23 ▇▇▇ 7 Unpatented West MMC 35967
24 ▇▇▇ 8 Unpatented West MMC 35968
25 ▇▇▇ 9 Unpatented West MMC 35969
26 ▇▇▇ 10 Unpatented West MMC 35970
27 ▇▇▇ 28 Unpatented West MMC 35988
28 ▇▇▇ 29 Unpatented West MMC 35989
29 ▇▇▇ 30 Unpatented West MMC 35990
30 ▇▇▇ 44 Unpatented West MMC 36004
31 GAY 1 Unpatented West MMC 36281
32 GAY 2 Unpatented West MMC 36282
33 GAY 6 Unpatented West MMC 36286
34 GAY 7 Unpatented West MMC 36287
35 GAY 11 Unpatented West MMC 36291
36 GAY 12 Unpatented West MMC 36292
37 GAY 15 Unpatented West MMC 36295
38 GAY 16 Unpatented West MMC 36296
Aurora-Trend Stillwater Venture January 26, 2005
Mountain View Lease Agreement Page 3 of 4 (Revised May 26, 2005)
Schedule A-2 - Claims Assignment
------------------------------------------------------------------------------------------
SCHEDULE A-2 - SCHEDULE 3 - MOUNTAIN VIEW LEASE AGREEMENT
UNPATENTED LODE AND PLACER CLAIMS IN STILLWATER COUNTY, MONTANA
------------------------------------------------------------------------------------------
TO BE
TO BE ASSIGNED
RETAINED TO AURORA-
STATUS AND LOCATION BY TREND
REF. MINERAL CLAIM WITH REFERENCE TO BLM MONTANA AURORA STILLWATER
NO. NAME STILLWATER RIVER MINERAL CLAIM NO. METALS VENTURE
------------------------------------------------------------------------------------------
39 Mountain View Unpatented West MMC 36376
Chrome Co.
▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
41 No. 5 Tunnel & Unpatented West MMC 36380
Tunnel Site
42 MALO Unpatented West MMC 36384
43 Red Bird No. 3 Unpatented West MMC 36396
44 ▇▇▇▇ ▇. Unpatented West MMC 36408
45 ▇▇▇▇ I Unpatented West MMC 36413
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
47 SUSU 22 Unpatented West MMC 53586
48 SUSU 23 Unpatented West MMC 53587
49 SUSU 24 Unpatented West MMC 53588
50 SUSU 26 (1) Unpatented West MMC 53590
51 SUSU 27 Unpatented West MMC 53591
52 ▇▇▇ fr. Unpatented West MMC 78928
53 GAY fr. Unpatented West MMC 78929
54 NEW 13 Unpatented West MMC 84655
55 Red Bird # 4 Unpatented West MMC 36397
56 Mill Site 69E Unpatented West MSN 156775
------------------------------------------------------------------------------------------
TOTALS 16.5 39.5
------------------------------------------------------------------------------------------
(1) Eastern half assigned to Aurora-Trend StillwaterVenture.
------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
SUMMARY
------------------------------------------------------------------------------------------
SCHEDULE 1 PATENTED 1 0
SCHEDULE 2 PATENTS APPLIED FOR 14 7
SCHEDULE 3 UNPATENTED WEST 16.5 39.5
------------------------------------------------------------------------------------------
TOTALS 31.5 46.5
------------------------------------------------------------------------------------------
Aurora-Trend Stillwater Venture January 26, 2005
Mountain View Lease Agreement Page 4 of 4 (Revised May 26, 2005)
Schedule A-2 - Claims Assignment
------------------------------------------------------------------------------
SCHEDULE A-2 - SCHEDULE 4 - MOUNTAIN VIEW LEASE AGREEMENT
WATER RIGHTS STILLWATER RIVER VALLEY AREA,
STILLWATER COUNTY, MONTANA
------------------------------------------------------------------------------
Lessors Water Right Number 43C-W-189530-00
------------------------------------------------------------------------------
Source Mountain View Lake - SW NE Sec. 20, Twp. 5S,
Rge. 15E M.P.M, Stillwater County, Montana
------------------------------------------------------------------------------
Indicated Flow Rate: 1.34 CFS
------------------------------------------------------------------------------
Indicated Volume 486.27 acre feet per year
------------------------------------------------------------------------------
Purpose (Use): Industrial
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Lessors Water Right Number: 43C-W-189532-00
------------------------------------------------------------------------------
Source: Verdigris Creek - S SW NE Sec. 20, Twp. 5S,
Rge. 15E M.P.M, Stillwater County, Montana
------------------------------------------------------------------------------
Indicated Flow Rate: 0.09 CFS
------------------------------------------------------------------------------
Indicated Volume 49.79 acre feet per year
------------------------------------------------------------------------------
Purpose (Use): Domestic (multiple)
------------------------------------------------------------------------------
Note: Assignment of the water rights to the Aurora-Trend Stillwater Venture
shall not restrict AM from access and usage of water for activities on the
claims within the Mountain View Lease Agreement which are not subject to the
Aurora-Trend Venture Agreement.